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Monday, May 28, 2007

Luck of the Irish: PM Bertie Ahern Set for a Third Term in Office - or is he?

by Manuel Alvarez-Rivera: San Juan, Puerto Rico

Irish Taoiseach (prime minister) Bertie Ahern appears set for a third term in office, following a general election last May 24 in which Fianna Fáil (Soldiers of Destiny), led by Ahern, remained by far the largest party in the Republic of Ireland, with 78 of 166 seats in Dáil Eireann, the House of Representatives. However, Fianna Fáil's coalition partners, the Progressive Democrats, fared badly in the election, losing six of their eight Dáil seats - including that of party leader and Tánaiste (deputy prime minister) Michael McDowell - and the ruling coalition lost its overall parliamentary majority.

Although Fine Gael (Gaelic Nation) - the main opposition party - scored major gains and went from 31 to 51 seats in Dáil Eireann, its "rainbow alliance" partners, Labour and the Green Party failed to improve upon their previous election showing: the Labour Party lost one of its twenty-one seats, while the Greens won six seats, the same number as in 2002. In all, the three parties won 77 seats between themselves, whereas Fianna Fáil and the Progressive Democrats hold a combined total of eighty.

Sinn Féin, which in recent years has become the second largest party in Northern Ireland (which remains part of the U.K.) and the largest party among that province's Catholic community, lost one of its five seats, while the small Socialist Party lost its single deputy. The Republic of Ireland has a long tradition of independent parliamentarians, and this year was no exception with five independents elected as deputies, but their number is considerably lower than in 2002, when thirteen non-party candidates won seats in Dáil Eireann.

Dáil elections are carried out by the Single Transferable Vote (STV) system, reviewed in Parliamentary Elections in Ireland - Elections to Dáil Eireann, where detailed results of last week's election are also available. STV is a proportional representation system, but the small size of the electoral constituencies (which elect from three to five deputies) usually favors the larger parties, especially Fianna Fáil. Moreover, parties that fail to attract a significant number of second preferences tend to do poorly under STV. This was the case with Sinn Féin, which won more votes than the Green Party but elected fewer deputies than the latter. (In addition, Sinn Féin's support tends to be concentrated in constituencies bordering Northern Ireland: many of these only have three seats, and even with a sizable vote transfer it can be fairly difficult to reach the resulting STV seat quota of 25%.)

At this juncture, it appears likely that Prime Minister Ahern will remain in office. According to press reports, Ahern is said to prefer a coalition with the Progressive Democrats and independent deputies; among the latter, two are former Fianna Fáil politicians, another is a former Fine Gael minister, and the remaining two are socialists. However, there has been speculation about a coalition between Fianna Fáil and the Green Party as a second choice. In the meantime, Fine Gael leader Enda Kenny hasn't given up hope on forming a government...

Update

Nearly three weeks after the election, Fianna Fáil reached a coalition agreement with both the Greens and the Progressive Democrats, under which Bertie Ahern was elected by the 30th Dáil as head of government for a historic third term on Thursday, June 14, 2007.

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Welcome to Global Economy Matters. Posts on Global Economy Matters are written by macro economists and policy analysts who have a common interest in global macro and economic policy.

Claus and Edward's "Baker's Dozen"

Claus Vistesen and Edward Hugh are proud and happy to announce that they are now working as "featured analysts" with a new Boston-based start-up - Emerginvest.

Claus and Edward have used a new, updated, methodology in order to identify a group of 13 emerging economies which we consider are going to outperform both the rest of the emerging economy group and the OECD economies in terms of a number of key performance indicators over the 2008 - 2020 horizon.

Through our association with Emerginvest we hope to develop performance indicators which will confirm both the relevance and validity of the selection procedure adopted.

We would like to point out that we have absolutely no financial connection whatsoever with Emerginvest - although we do heartily endorse what they are trying to do.

In particular we see the move by the investment community towards emerging markets as one of the most effective and direct ways to address those issues of inter-country wealth and income imbalances which have plagued our planet for so long now - namely by getting the money from the rich who have it to the poor who need it.

Sending investment to emerging economies is also a way of addressing the underlying imbalances which exist between the relatively older populations of the developed economies who increasingly need to save, and the relatively younger emerging economies who can benefit from the investment of those savings in their countries. So in a way you can both ensure the future of your own pension and help attack poverty at one and the same time. This type of possibility is normally known in economics as "win-win".

The oldest known source and most probable origin for the expression "baker's dozen" dates to the 13th century in one of the earliest English statutes, instituted during the reign of Henry III (r. 1216-1272), called the Assize of Bread and Ale. Bakers who were found to have shortchanged customers could be liable to severe punishment. To guard against the punishment of losing a hand to an axe, a baker would give 13 for the price of 12, to be certain of not being known as a cheat. Specifically, the practice of baking 13 items for an intended dozen was to prevent "short measure", on the basis that one of the 13 could be lost, eaten, burnt or ruined in some way, leaving the baker with the original dozen.